Going through a divorce is emotionally taxing and it comes with a seemingly unending legal process. Dividing assets and custody agreements typically take priority but updating your will and estate plan are equally as important. Below are three areas that should be reviewed immediately in the event of a divorce.
What You Need to Know
The effect that a divorce has on a will can vary. However, regardless of what your provinces rules are, they should not be relied on as a substitute for updating your estate plan. Generally, when you get divorced it is a good idea to update your will to remove your former spouse and any family members of the former spouse that may have been included in your will. This will ensure that your estate goes to who you intend it to without any confusion.
- Beneficiary Designation
RRSP/RRIF, TFSA, and Life Insurance products all require a named beneficiary. Regardless of the laws and regulation regarding wills, divorce does not have an effect on beneficiary designations. Beneficiaries typically will override a will, so it is essential that care is taken to update your investments and insurance as soon as possible. It is important to consult any legal agreements you may have with your former spouse, such as separation agreements, before doing this. There may be provisions that disallow the changing of beneficiaries.
- Power of Attorney
Divorce has no impact on an individual’s appointment for power of attorney, or for personal care. Obviously, having an ex-spouse be the one to make important decisions on your behalf would be not be desirable. Therefore, if your ex-spouse was your POA, it is of extreme importance that you take the time to choose a new person to fulfill this role.
Updating your estate plan is a necessary step in the divorce and separation process. Doing so in a timely manner will ensure that your last wishes are fulfilled. It is always a good idea to meet with a lawyer in the event of a change in marital status to ensure that you have covered all your bases.